How you can determine a good deal with this survey
I am sure that many of you here are reading this because at some point of your career you stumble into a good deal, then stop dead in your tracks because you’re worried about the decision, and never do anything. In my first year of investing, I looked at hundreds of great deals and froze. I was just the same as you, asking myself if this was a good deal or not, how did I know if it could make me money and many more. Here’s what I would suggest you do from now on in order to help assist you in making the right decision.
I wish I can tell you what the exact cards that will come out on a Blackjack table, without a doubt, you would play them because you have information about what will happen. But sadly, that’s impossible no matter how experienced you are. Just like real estate investing there’s no “One guaranteed success formula”. However, if you gather lots of meaningful information and ask the following questions first. It will help you decide if you should make an offer:
- Identify what repairs are needed?
It is important that you find this information out and I would suggest you get it from either the seller or a good licensed contractor. Why? Because only they will provide you with the most honest answer regarding the property and from there you’ll be able to estimate how much cost exactly will you be spending and not overspending.
- What is the property worth today?
Here is where you need to be smart at. Looking at comparable sales, usually three to five sales of similar property close by. And also keep track every property bought or sold within the area you want, when doing this you want to make sure that all the information is in writing, email, or letter so that it would be easier for your future reference.
- What can you get it for?
How do you know if it’s a good deal or not? Typically a good deal should be at least 20% below market. Remember to always negotiate it with sellers because that is where you make money on real estate. Negotiate for a good price and try to sell it at a higher price to earn the profit in between. Don’t be dumb and buy right away when the seller tells you that they have given you the best possible price. Because every property’s value is different depending on who is looking at it, making sure that you have someone professional to discuss with is important as well.
Another easy method you can use to determine market value is by running a newspaper ad that includes details of the property. Once you’ve done that, give yourself a time frame to observe the response. If the phone rings, people want what you have to offer but if it doesn’t you know that there is something you need to change.
Now do your analysis
With this quick survey, you’ll identify if it’s a good deal or not rather than waiting to analyze which typically takes up to six weeks. Probably by the time you figure it out, the deal is no longer available at the table. I hope this quick survey would provide some value and insights to beginners.